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JODC's H1 2022 Revenue Surges to Near Pre-Pandemic Levels on Recovery in Umrah Activity
 
• Government’s exceptional management of the pandemic and easing of the restrictions on pilgrimage activities led to a significant increase in the number of pilgrims 
• Revenue in H1 was SAR 391 million, more than tripling year on year 
• Sustained improvement in gross profit driven by Company’s transformation strategy
• Company expects to bring in new sources of revenue from our recently opened malls and soon-to-be-opened hotels
 
Makkah, KSA - 22,  August 2022: Jabal Omar Development Company (“JODC” or the “Company”) (Tadawul: 4250), one of the largest real estate developers in Saudi Arabia and the master developer of the iconic mega mixed-used project in Makkah, Jabal Omar, today announced its financial results for the second quarter (Q2) and six month period (H1) ending 31 June 2022.
 
• H1 2022 revenue surged almost four-fold to SAR 391.3 million, driven by the strong performance of the hospitality portfolio and improving occupancy and footfall at retail properties on the back of the remarkable recovery in Umrah activities. 
- In H1 2022, Hospitality Revenue increased 287%% YoY due to increases in both occupancy and ADR (average daily rate) 
- In H1 2022, revenue from the Retail portfolio increased 326%% compared to H1 2021 on revenue maximization initiatives and increased footfall 
• The Government’s exceptional management of the pandemic and easing the restrictions on pilgrimage activities led to a significant increase in the number of pilgrims since the start of the year.
• In H1 2022, gross profit soared by 152.9% YoY to SAR 71.5 million, up from a gross loss of SAR 135.2 million in the same period a year ago. This is attributed to higher revenues, cost containment measures, and efficiencies from the Company’s comprehensive transformation strategy. 
• Operating loss was SAR 31.1 million in H1 2022, a significant reduction of 91.5% from SAR 365.0 million in H1 2021. This is mainly attributable to the Company improving its operational performance due to the various initiatives it launched in 2021.
• Financial costs decreased by 24.1% YoY to SAR 283.6 million in H1 2022, down from SAR 373.6 million in H1 2021, driven by the positive realization of initiatives within the Company’s capital structure optimization plan. 
• On a normalized basis (excluding net gain from the land sale in Q2 2021 of SAR 662 million), the Company reported a narrowing net loss in H1 and Q2 2022 versus the corresponding periods in 2021
• The Company has a sizeable asset base made up predominately of strategically and uniquely located infrastructure-enabled land with total assets at SAR 27.1 billion as of 30 June 2022, relatively unchanged from 31 March 2022. 
• Cash and cash equivalent as of 30 June 2022 is SAR 296.8 million, up 58.3% compared to SAR 187.5 million as of 31 March 2022.
 
Khaled Al Amoudi, CEO of Jabal Omar Development Company, said: 
“The above-expected activity level in the Hajj and Umrah sector since the start of 2022 supported our top-line solid performance. Occupancy levels at our hotels were almost back to pre-pandemic levels, and footfall at our malls also witnessed a solid recovery momentum. We are expecting these levels to be sustained for the remainder of the year, as there remains pent-up solid demand for pilgrims, both domestic and international, to visit Makkah and the holy sites. 
 
The ongoing implementation of our company-wide transformation plan continues to reflect positively on our financial performance. Our gross and operating profits are improving significantly, thanks to the cost containment and operational efficiency enhancement measures. Moreover, we continue to see the tangible, positive impact of our ongoing capital structure optimization plan. Our balance sheet is becoming more robust, and our financial position more sustainable compared to the past two years. 
 
Looking ahead, we expect to bring in new sources of revenue from our recently opened malls and soon-to-be-opened hotels. We are also focused on making substantial progress on construction work for phases 2,3, and 4. Moreover, we will continue optimizing our operating assets, further deleveraging our balance sheet and optimizing our capital structure. The impending EGM to vote on the Alinma Fund debt-to-equity transaction will be a game changer for us; if approved by our shareholders, the Company will be entirely on track to achieve its targets short-short for short to mid-term targets.”
 
 
Company Highlights 
 
Continued execution of JODC’s transformation
 
The Company received Capital Market Authority (CMA) approval for a capital increase by converting all outstanding debt owed to Alinma Fund into ordinary shares. The EGM will be held on 25 August to vote on the transaction. Upon its completion, 225,134,162 new ordinary shares will be issued to the fund's unitholders issued given, excluding the Company’s ownership of the fund and SAR 5,301,201,080 of debt will be converted into equity. The total value of the transaction will be determined based on the closing price of the Company’s shares on the last trading day before the date of the EGM. If approved, the Alinma Fund’s new shares are expected to be issued and the assets transferred to JODC in Q3 2022.
 
 
Project construction for Phases 2, 3 & 4 set for timely delivery 
 
JODC continues to expedite project delivery as part of the Company’s strategic priorities. Over the past two years, JODC has made numerous improvements, including greater visibility on cost and completion dates as a holistic organizational restructuring of the project management teams to enhance efficiency. 
 
• Phase 2 is 85.82% complete and expected to finish construction on Q4 2022
• Phase 3 is 90.52% complete and expected to finish construction on Q1 2023
• Phase 4 construction progress will re-commence in Q3 2022: currently, 63% complete
 
Revenue momentum to continue gathering pace as Hajj & Umrah sector recovers
 
The Company expects the positive revenue momentum seen over the past 6-month period to continue with the removal of pandemic restrictions, the increase in travel, and the practical efforts of the Government in the management of the pandemic. 
 
JODC expects to benefit from strong solid, and robust recovery in the number of visitors over the year and the upcoming Hajj season in particular. The Company has already seen this recovery and bear fruit, with over 6.6 million pilgrims performing Umrah during Ramadan 2022 and nearly 1 million pilgrims between 7 and 12 July during Hajj. More than 23 million Umrah permits have been issued since the beginning of the season, according to the Ministry of Hajj and Umrah, representing a positive outlook for the remainder of the year.
 
A growing portfolio of operational assets
 
JODC has six operational hotels in its hospitality portfolio and expects two more to be operational before the end of the year, which will further add to top-line growth. In its retail portfolio, the Company is in active negotiation with several major retailers to secure quality tenants at its newly opened premium retail destination in phase 2 & 3, Souk Al Khalil (3) and Souk Makkah Gate.


Posted by : Saudi Arabia,Riyadh, Jeddah, Dammam, Meccca and Medina PR Network Editorial Team
Viewed 4276 times
PR Category : Banking & Investments
Posted on : Monday, August 22, 2022  9:13:00 AM UAE local time (GMT+4)
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